Ohio State chief investment officer wins award for best-managed large nonprofit endowment
November 2, 2010
Jonathan Hook, chief investment officer for Ohio State
Thirty-three nominees competed for 11 spots in FEMM's 2010 Nonprofit Awards For Excellence. Ohio State was up against stiff competition from the Kresge Foundation and the University of Texas Investment Management Company in the Best Large Nonprofit of the Year category. FEMM solicited input on the nominees from the industry, but the final nominees were chosen by FEMM staff. They also state that while performance was considered for all categories, it was not a sole determinative factor: innovative investment strategies, bold bets that paid off, and other unique accomplishments were considered as well.
According to FEMM, “CIO Jonathan Hook has been active in bringing the $1.95 billion Ohio State endowment up to date since joining the Columbus-based school last year. The Buckeyes revamped their hedge fund investments by adding more long/short equity managers to the mix at the expense of long-only investments.
“Long/short managers now handle 15% of the total fund, up from 3% last year. The fund is also reducing instances of manager duplication and has added macro commodities and secondary private equity.
“The moves come at the expense of long-only managers, which managed 65% of the portfolio at the start of 2009 and now handle just 27%. The fund decided to add managers that held more concentrated portfolios and focused on the best ideas, shunning index-like passive exposure. The scheme increased exposure to managers who engage in deep fundamental research. Meanwhile, the exposure to macro and commodities has added diversification to help in a more volatile environment. To date, returns in the equities area have kept up with its long-only benchmark while damping volatility and reducing beta by 35-40%.
“In combination, these changes helped the portfolio return 21.6% for the first 10 months of the fiscal year, which began on July 1, 2009. The return is about 300 basis points above its benchmark.”